Exchange Rate Outlook Today: Pound sterling, Euro, US dollar, Australian dollar, Japanese Yen

The dollar remains dampened by somewhat dovish comments from the Fed’s Williams late on Tuesday.

The majors bounced higher against the USD on Wednesday while positive risk appetite developments also dragged the JPY lower across the board. Despite dovish expectations surrounding the ECB meeting on Thursday, the EUR was underpinned by supportive PMI readings and a surge in Sep German factory orders.

The GBP was also similarly supported in the wake of significantly better than expected September industrial output numbers.

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Below are the latest exchange rate forecasts issued by Emmanuel Ng at OCBC Bank:

Pound dollar exchange rate outlook:

"With the September UK industrial production numbers also outperforming prior expectations, investors may continue to look towards any changes in the BOE’s forecasts in its BOE Inflation Report next week.

"Meanwhile, the BOE expected to stand pat today and the sterling may instead look towards the ECB and Fed taper prospects for further directionality. We remain neutral on the pair in the interim."

Euro dollar exchange rate outlook:

"Pending the ECB meeting later today, expect the EUR-USD to remain anchored around the 55-day MA (1.3486) and 1.3500 area. We think the risk-reward may continue to favor downside tests for the pair in the
interim given the dovish baggage attached to the ECB."

Dollar Yen outlook:

"USD-JPY Despite chatter created by two Fed working papers arguing for a raising of the bar (i.e., a lower unemployment rate trigger) with respect to tightening monetary policy, positive risk appetite developments on Wednesday continued to keep the USD-JPY supported. On the technical front, we think the pair is attempting to base build off the 55-day MA (98.45) with 99.00 the next upside objective."

Aus dollar vs US dollar outlook:

"October labour market numbers this morning came in on the wrong side of expectations and tripped the AUD-USD below 0.9500. This should keep the pair tethered to the 0.9500 area now pending the further swings in the broad dollar and the deluge of Chinese data releases this weekend. In the interim, we would persist with a top-heavy stance for the pair.